All of the Following Are Examples of Spending on Factors

question 178

Multiple Choice

All of the following are examples of spending on factors of production in the circular flow model except

• A)Bima hires two students to work at his ice-cream store.
• B)"Get Fit Together" purchases 3 new treadmills for its gym.
• C)Iris buys a dozen roses for her mother's birthday.
• D)The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

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Definitions:

Federal Trade Commission

A U.S. federal agency established in 1914 to promote consumer protection and the elimination and prevention of anticompetitive business practices.

Legal Cartel Theory

A concept where a group of firms or entities legally agree to control production, pricing, or marketing of goods and services to dominate a market.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, indicative of cost per unit.

Price-fixing

An illegal agreement among competitors to set prices at a certain level, rather than letting them be determined naturally by the market.